"New York — like the rest of the nation — is currently struggling with the environmental impact of plastic and paper bag waste, particularly with a focus on plastic bags,” Cuomo said. “Plastic bags are convenient, but not without financial and environmental costs.”

Supporters of the moratorium criticized the bag fee as nothing more than a tax that would hurt lower-income people.

“I'm absolutely thrilled that the madness has been put on hold and I hope that during the next year that maybe we can come up with something that is more acceptable to both sides of this,” said Assemblyman Dov Hikind (D-Brooklyn).

Opponents of the delay, including Mayor de Blasio, had argued the fee would benefit the environment.

"Instead of protecting the autonomy of the New York City Council and our legislative process, Gov. Cuomo has added to the rampant dysfunction that is Albany by putting cheap politics ahead of our environment and the will of the people who actually live in New York City,” Levine said.

Levine said that the Council would have been willing to earmark a portion of the bag fee for environmental purposes had Cuomo and the Legislature granted the authority to do so.

“The New York City Council's Bring Your Own Bag law would have stopped the scourge of plastic bags in our City, and this ridiculous state law undermines New York City's authority, hurts New Yorkers and sets a dangerous precedent for our city and every other locality in the state,” she said.

Cuomo, who last week called it a “complicated” issue, legally had until Saturday to sign or veto the moratorium bill that the Legislature passed last week.

But with the city law imposing the bag fee set to go into effect on Wednesday, Cuomo acted Tuesday.

“While there are no doubt institutional political issues at play, and while New York City's law is an earnest attempt at a real solution, it is also undeniable that the City's bill is deeply flawed,” Cuomo said.

He called the provision that merchants keep the 5-cent fee as profit “the most objectionable.”

Mayor de Blasio said the bag fee was designed to change people's behavior to get away from using plastic bags, which clog landfills.

(Alec Tabak/for New York Daily News)

He argued there were two possible rationales. The Council either needed the political support of the merchants and gave them what he said was a $100 million incentive to back it or the city recognized it lacked the legal authority to impose a fee that went to the government, he said.

“In either case, the windfall profit to private entities is unjustifiable and unnecessary,” Cuomo wrote.

By signing the bill, Cuomo also avoided a potential override battle with the Legislature, which would have been the first since taking office in 2011.

The governor noted in his statement that the bill to impose the bag fee passed the Council by just eight votes while the legislation to impose the moratorium passed the two houses of the state Legislature by a combined 165 to 32.

The city law passed last year and was originally supposed to go into effect in October. After state lawmakers expressed concerns, the city agreed to delay it until Feb. 15 to see if the sides could reach a compromise. That didn’t happen, with state legislators expressing frustration that the Council barely moved.

“Legislation often requires compromise but not capitulation,” Cuomo said. “There is no need to pass an overly compromised bill — we can and should promulgate the best policy in the country. That is the New York way.”

Cuomo said plastic bags are a statewide problem, which is why he created a task force that will be co-chaired by members of the Senate and Assembly “so that the recommendation can be quickly legislated.”

The body needs to consider whether the state should ban paper and plastic carry-out products, whether a tax on such bags is the best approach, and if so, at what level and who should be the beneficiary. He also asked whether the state should be obligated to supply reusable bags during a transition period so low-income consumers aren’t hurt economically.

Cuomo said he is looking for the commission to finish its work and make its recommendations by the end of the year.

Sen. Marisol Alcantara is one of the lawmakers hoping to offer a sales tax rebate to customers who use reusable bags.

“If allowed to go forward, this onerous bag tax would have hurt low- and middle-income residents the most, making it even more difficult to make ends meet in what is already the most expensive city in the world,“ Flanagan said

But state Sen. Liz Krueger (D-Manhattan) and environmental groups expressed disappointment with Cuomo. Krueger argued that the moratorium sets a dangerous precedent “that local solutions to local environmental issues will be overturned in Albany.”

“This is simply unacceptable,” she said. “If the Legislature is unable or unwilling to tackle the unprecedented environmental challenges we face, they should at least get out of the way so local people can solve their own problems."

Stuart Gruskin of the Nature Conservancy called it “unfortunate that a measure to reduce plastic pollution affecting our waterways and communities has been delayed” but thanked Cuomo for his commitment to quickly address the issue.

And Jordan Levine, of the New York League of Conservation Voters, said: "Let us be clear: a task force that does not lead to a robust statewide law is not an acceptable consolation prize.”

Hours before Cuomo announced his decision on the bill, Assemblyman Luis Sepulveda (D-Bronx) and Sens. Marisol Alcantara (D-Manhattan) and Ruben Diaz (D-Bronx) offered up an alternative to the bag fee.

Rather than hit customers who use plastic and other disposable bags with the 5-cent fee under the city law, a new bill would actually pay them to use reusable bags.

Under the plan, customers across the state who choose to use reusable bags would receive an instant 3-cent sales tax rebate from the stores.

“This legislation will hopefully be a wise compromise that satisfies both sides of the argument over a fee on plastic bags,” Sepulveda said. “It’s a win for environmentalists and a win for the elderly and the poor.”